Students already faced with enough debt

April 18, 2012

I am a student at Southwest Minnesota State University and serve as the president of the SMSU student government. I also am a board member of the Minnesota State University Student Association. The students I serve are working hard to complete their education. Students have jobs and apply for grants, but most must borrow to finance their college degrees.

In Minnesota, state appropriation and federal aid have failed to keep pace with the rising cost of college. As a result more students than ever rely on student loans. The Project on Student Debt shows the average borrower at SMSU graduates with more than $18,000 in student loan debt.

And now, in the midst of more borrowing and higher and higher tuition, on July 1 the federal student loan interest rate will double, from 3.4 percent to 6.8 percent for the estimated 300,000 Minnesota students who will take out federal loans after July 1.

If Congress does not take action, the average subsidized Stafford loan borrower will have $2,800 in increased student loan debt over a 10-year repayment term. Those who borrow the maximum of $23,000 will see their interest payments increase approximately $5,000 over a 10-year repayment period and $11,000 over 20 years. These loans are provided to almost 8 million low- and moderate-income students nationwide each year and do not accumulate interest while the borrower is in school.

We support the efforts to keep student loan interest rates from doubling. President Barack Obama has proposed a one-year freeze on interest rates in his budget request to Congress. This is a step in the right direction to ensure interest rates on student loans are more responsive to economic trends.

Heavy student loan debt carries crippling consequences for students. High debt can affect where graduates live, the kind of careers they pursue, when they start a family or whether they purchase a home. We simply cannot afford to balance the budget on the back of students.